With a market cap of over $400 billion, Johnson & Johnson (JNJ) stands as one of the largest healthcare companies globally, offering a diverse product lineup spanning pharmaceuticals, devices, and consumables.
Investing in a company of such stature can be an attractive opportunity for many individuals seeking long-term growth and stability.
In this article, we will guide you through the process of investing in Johnson & Johnson stock, providing essential considerations and steps to help you make informed investment decisions.
Table of Contents
How to Buy Johnson & Johnson Stock?
1. Set Up an Investment Account
To get started with investing in Johnson & Johnson stock, you’ll need an investment account. If you don’t have one yet or are thinking of changing your current platform, it’s important to select a reliable online broker or investment app. Here are a few tips to make the process easier:
- Choose a reputable platform: Look for online brokers or investment apps that have a good reputation and positive reviews. This will ensure that your investments are secure and that you receive reliable support. To help you get started, we’ve compiled a list of the best online brokers.
- Consider trading convenience: Opt for platforms that offer user-friendly interfaces and easy stock trading. This will make it simpler for you to buy and sell Johnson & Johnson stock whenever you want.
- Watch out for fees: Pay attention to trading fees charged by the platform. Look for options that offer low or no trading fees, as these can significantly impact your overall returns.
- Check minimum requirements: Some platforms have minimum deposit or investment requirements. Make sure to choose one that aligns with your budget and investment goals.
Moreover, think about the different account types available. Depending on your needs and financial goals, you may consider individual retirement accounts (IRAs), taxable accounts, or specialized accounts like 529s for education savings. These account types offer various benefits and tax advantages, so it’s worth exploring them to find the best fit for your circumstances.
2. Align Investment Goals
Before you decide to invest in Johnson & Johnson or any other stock, it’s important to make sure that your investment aligns with your overall financial goals.
Start by considering why you want to invest. Are you looking for a source of income? Johnson & Johnson currently offers a dividend rate of around 2.5%, which is higher than what you would get from a savings account but lower than some other potentially safer investment options like I bonds.
If your main objective is to see your portfolio grow, it’s worth noting that Johnson & Johnson is a well-established company that tends to provide stable returns rather than rapid growth. Therefore, it might be more suitable as a foundational component of your investment portfolio rather than a sole investment focused solely on growth.
3. Determine Your Investment Amount
When investing, never go all in. Deciding how much you can invest in JNJ involves a few considerations:
- Budget: Only invest the money that is surplus after covering regular expenses, retirement contributions, and emergency funds.
- Current Price of JNJ: With JNJ’s price over $100 for years, you may require a platform allowing fractional shares purchases, particularly if your resources are limited or you prefer diversification.
- Investing Strategy: Consider dollar-cost averaging, investing small amounts consistently over time, which may help reduce the average cost per share and mitigate the risk of buying high.
- Other Investments: Diversify your portfolio with a mix of different stocks to reduce overall risk.
4. Research Johnson & Johnson
As a public company, JNJ is obligated to disclose significant information about its financial condition. You can easily access these details through JNJ’s investor resources page or the Security and Exchange Commission’s (SEC) database.
To enhance your research, consider analyzing information from resources such as Morningstar or the research tools provided by your brokerage. This will help you feel more confident about the company’s operations.
5. Buy JNJ Stock
To purchase JNJ (Johnson & Johnson) shares, follow these steps:
- Log into your brokerage platform.
- Find the input field for entering the ticker symbol and type in “JNJ” for Johnson & Johnson.
- Specify the number of shares or the dollar value you wish to buy.
- Choose the type of order you want to place: market or limit order. A market order will buy the shares at the current market price. On the other hand, a limit order allows you to set the maximum price per share that you are willing to pay.
6. Sell JNJ Stock
If you want to sell your JNJ (Johnson & Johnson) shares, the process is similar to buying. Just follow these steps:
- Log into your brokerage account.
- Look for the option to place a sell order.
- Specify the number of shares or the dollar value you want to sell.
- Keep in mind the potential tax implications if your shares are held outside of tax-advantaged accounts such as IRAs or 401(k)s. It’s important to consider any tax obligations you may have when selling your shares.
Is Johnson & Johnson (JNJ) a Buy?
Your investment decision in Johnson & Johnson (JNJ) will depend heavily on your personal financial goals, risk tolerance, and investment horizon.
Reasons to Invest:
- Continued Growth in Healthcare Spending: If you believe that the healthcare sector will continue to grow, investing in Johnson & Johnson could be a sensible choice. Given the ageing global population and ongoing health crises, it is plausible that healthcare spending will continue to increase, potentially leading to more revenue for companies like JNJ.
- Understanding the Company: You appear to have a good understanding of how Johnson & Johnson operates. An informed investor is typically a more successful investor, as they can make more informed decisions based on changes in the company’s business model or industry.
- Long-term Performance: If you believe that JNJ can outperform the S&P 500 over the long term, it may be a good addition to your portfolio.
- Dividend Income: Johnson & Johnson has a solid track record of paying dividends. If you are seeking a steady stream of income, owning dividend-paying stocks like JNJ can be advantageous.
- Stability: If you are close to retirement, you may prefer to own shares in a stable company. With a long track record and diverse product portfolio, Johnson & Johnson offers a degree of stability compared to younger, more volatile companies.
- Value Unlocking: If you think that the upcoming spinoff of Kenvue will unlock value for shareholders, this could be another reason to consider investing in JNJ.
Reasons to Reconsider Investing:
- Big Pharma Concerns: If you are hesitant about investing in big pharma due to ethical or industry-specific risks, then JNJ may not be the right choice.
- Time Constraints: Managing investments takes time and effort. If you don’t have the time to follow two separate companies (JNJ and Kenvue post-spinoff), you might be better off investing elsewhere.
- Growth Phase Preference: If you are younger and prefer to invest in earlier-stage, high-growth companies, JNJ might not be the ideal choice as it is a mature, well-established company.
- Dividend Income: If you’re investing with the primary goal of capital growth and don’t require dividend income, there could be other more suitable opportunities in the market.
Is Johnson & Johnson Profitable?
Johnson & Johnson (JNJ) is an incredibly profitable company that offers promising opportunities for investors.as an excellent long-term record of increasing its revenue, income, and shareholder value. Profit growth is a crucial factor that drives stock price appreciation over the long term, making it an area worth considering for novice investors before purchasing shares in a company.
In terms of profitability, Johnson & Johnson has consistently performed well. In 2022, the healthcare giant generated $27 billion in adjusted earnings, marking a notable 3.2% increase from the previous year. This growth is a clear indicator of the company’s ability to generate strong profits and sustain its financial success.
What sets Johnson & Johnson apart is its impressive track record of continuously increasing revenue, income, and shareholder value over the long haul. This means that the company has consistently found ways to expand its business, enhance its financial performance, and create value for its shareholders.
Does Johnson & Johnson Pay a Dividend?
Johnson & Johnson (JNJ) has an exceptional dividend history. In 2022, the healthcare giant achieved its 60th consecutive year of increasing dividends, making it a member of the exclusive Dividend Kings group. These are companies that have consistently raised their dividends for 50 or more years.
Johnson & Johnson’s dividend track record demonstrates its financial stability and long-term performance. Dividends provide a reliable income source for investors, and the company’s commitment to rewarding shareholders is evident through its consistent dividend increases.
For investors seeking a dependable income stream, Johnson & Johnson’s dividend history makes it an attractive choice.
The Bottom Line
Johnson & Johnson (JNJ) is a global healthcare giant positioned to benefit from the growth in healthcare spending. With the potential for continued earnings and dividend growth, the company offers an attractive investment opportunity.
Its strong market position and diverse product portfolio make it a reliable choice for investors seeking steady growth in the healthcare sector. Johnson & Johnson’s track record of increasing dividends adds to its appeal, providing a consistent income stream.
Overall, JNJ presents a compelling option for individuals looking for stability and long-term potential in the healthcare industry.